Morgan Stanley Crypto: Bank Plans ETrade Spot Trading in 2026 | Bitcoin Nears $97K
2025-05-02 08:40:53Wall Street Giants Morgan Stanley and Charles Schwab Enter Crypto: Bitcoin Nears $97K Amid Institutional Surge
Traditional Finance Embraces Crypto as Major Banks Prepare to Offer Spot Trading
The cryptocurrency market is witnessing a seismic shift as two of Wall Street’s most influential financial institutions—Morgan Stanley and Charles Schwab—announce plans to launch spot crypto trading for retail and institutional clients. Bitcoin (BTC), the flagship cryptocurrency, briefly surged past $97,000 following the news, reflecting heightened investor optimism around mainstream adoption.
The moves signal a dramatic reversal from the cautious stance many banks held under previous U.S. administrations. With regulatory barriers easing under the Trump presidency, major financial players are now racing to capitalize on growing demand for digital assets. Analysts predict this could trigger a new wave of institutional investment, further legitimizing crypto as an asset class.
Why Now? The Regulatory Shift Fueling Wall Street’s Crypto Push
Trump’s Pro-Crypto Policies Open the Floodgates
Since Donald Trump’s return to the White House in 2024, his administration has rolled back several restrictions that previously deterred banks from engaging deeply with cryptocurrencies. Key developments include:
Repeal of SEC accounting guidance that made it difficult for crypto firms to partner with banks.
Withdrawal of 2023 FDIC and Federal Reserve warnings on crypto risks, giving banks more confidence to explore digital assets.
Executive orders promoting U.S. leadership in digital assets, framing crypto as an economic growth driver.
Morgan Stanley CEO Ted Pick acknowledged these changes, stating in January 2025 that the bank was working with regulators to determine how it could safely facilitate crypto transactions.
Institutional Demand Reaches a Tipping Point
Charles Schwab CEO Rick Wurster revealed that traffic to the firm’s crypto-related content surged 400% in recent months, with 70% of visitors being prospective clients. This surge in interest has accelerated Schwab’s timeline, with the brokerage now aiming to offer spot Bitcoin and Ethereum trading by April 2026.
Similarly, Morgan Stanley is preparing to integrate crypto trading into its E*Trade platform, potentially as early as 2026, with partnerships being explored to enable BTC and ETH spot trading.
Market Impact: Bitcoin’s Rally and the Threat to Crypto-Native Exchanges
Bitcoin’s Brief Break Above $97K
The announcements from Morgan Stanley and Schwab contributed to Bitcoin’s latest rally, briefly pushing it above $97,000 before a slight retracement. Analysts suggest that institutional entry could stabilize crypto markets by increasing liquidity and reducing volatility.
However, Bitcoin’s year-to-date performance remains slightly negative (-0.78%), indicating that broader macroeconomic factors—such as Fed policy and geopolitical tensions—still play a significant role.
Competition Heats Up for Coinbase and Robinhood
The entry of Wall Street giants poses a direct challenge to crypto-native exchanges like Coinbase, Kraken, and Robinhood.
Robinhood, which derived 21% of its 2024 revenue from crypto trading, saw its stock dip on reports of Morgan Stanley’s impending move.
Coinbase, long the dominant U.S. exchange, may face pressure as Schwab and Morgan Stanley leverage their existing client bases of millions of investors.
Industry experts argue that traditional brokers could attract more risk-averse investors who prefer trading crypto within a regulated framework rather than on standalone platforms.
What’s Next? The Road to Mass Adoption
Schwab’s Crypto Strategy: A Trusted Gateway
Unlike crypto-first firms, Schwab is targeting existing clients who want limited exposure to digital assets rather than hardcore enthusiasts. Wurster emphasized:
“Our edge is serving investors who already own stocks and bonds and are intrigued by crypto—not those looking to trade dozens of altcoins.”
The firm is also collaborating with Trump Media & Technology Group (TMTG) on Truth.Fi, a financial services platform offering Bitcoin and crypto-linked ETFs.
Morgan Stanley’s Play: Bridging Wealth Management and Crypto
Morgan Stanley, already a leader in wealth management, plans to offer crypto trading through E*Trade, a platform with a strong retail presence. The bank’s high-net-worth clients already have access to Bitcoin ETFs and futures, but spot trading would mark a major expansion.
Analysts suggest that if successful, other banks—such as Bank of America and Goldman Sachs—could follow suit, particularly if the SEC approves more crypto ETFs.
Conclusion: A Turning Point for Crypto?
The decisions by Morgan Stanley and Charles Schwab to enter spot crypto trading represent a watershed moment for the industry. With Bitcoin testing new highs and regulatory hurdles diminishing, 2026 could be the year Wall Street fully embraces digital assets.
Will traditional finance’s involvement bring stability or new risks to crypto markets? Share your thoughts on our X.
Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.